Concepts you will encounter throughout your relationship with ERP

If you are someone who has just found an answer to the question of what is ERP as a concept, you will encounter many different concepts and terms as you dive deeper into the world of ERP. When you enter the ERP Software Selection Process and ERP Project Management Process, it is useful to learn the following concepts in order to better understand what the institutions and people mean. Especially the solution provider ERP software companies, what they will give you, and what they can expect.

Software License

Software license is a legal concept that proves that a software solution is granted to an organization or end user. The license does not have to be a printed document, as these agreements may be sufficient for granting the usage rights of the software that are mostly licensed with usage agreements. Source codes and object codes of software solutions are protected by copyright laws all over the world. For this reason, having a software license does not mean owning the source code of that software, being able to interfere with the code, having that software used by 3rd party persons or organizations, selling, renting, copying and disseminating the software. Depending on the content and scope of the licensing, the usage right can be user-based, server-based, fixed-term or unlimited-term.

ERP Project - Implementation

ERP software is not packaged software. For this reason, in order for you to start using it in your company as soon as you purchase, there is a need for a series of studies, including the development of additional code on the ERP software you purchased, in order to make the appropriate parametric definitions and settings for your company within the ERP program and to meet some of your special needs. All of these processes are called implementations. For this reason, ERP purchases bring along a project process that can start from a few months and last up to a few years.

A typical ERP software project includes needs analysis, software installation, training of the ERP project team, making the necessary adjustments and parametric definitions specific to your company on the ERP system, implementing the process designs and approval mechanism, additional code development, and data transfer. At the same time, it consists of stages such as testing, user training and transition to live. Services such as project management, consultancy, development, training, go-live support provided within the scope of ERP projects are charged according to the man/day spent or man/hour according to the country and are requested from the companies separately from the license fee.

Maintenance

ERP software is dynamic and living systems. Tens of hundreds, perhaps thousands, of users enter data into the ERP system every day and run their operations. The interruption of such a dynamically used system may mean that the business stops in the enterprises. For this reason, it is very critical to regularly update the ERP systems and to eliminate the faults that occur due to the user or in the system. Parts such as accounting, finance and HR payroll included in the ERP program are the parts that should be fully compatible with legal updates. In addition, in light of technological developments, the technologies used in the infrastructure or front-end of the software change rapidly day by day. It is critical for the software to adapt to these technological changes. For this reason, ERP solution provider companies regularly carry out R&D studies and release new versions of their products in order to adapt their products to these developments.

The maintenance service basically includes presenting the current versions of the ERP software to the customer, adapting to legal and technological updates and troubleshooting. ERP companies often offer annual renewal and maintenance packages that are priced at a certain rate over the license price for which they sell the software. By purchasing these packages, customers get new versions, product updates and bug fixes guaranteed. Maintenance and renewal packages or maintenance services are a kind of insurance for ERP software. Failure to purchase may result in losses that may result in high sales and loss of profits for companies. In Cloud ERP licensing, maintenance costs are often added to the monthly or annual license usage fees.

Customization

We mentioned that ERP software is not plug-and-play software. Customization means making arrangements in accordance with your company, processes and operations within the ERP program. In fact, the main subject of ERP projects is to carry out this customization work. Customization has two aspects. One of them is the customization that can be done with the customization tools offered in the ERP program you purchased, which are indispensable. The other aspect of customization is the new functions and features added by changes made to the product source code or by developing additional code on the product. This is an issue that needs attention. We recommend you to read the article we wrote about the "Difficulties of Customization in ERP Projects".

Cloud

The concept of cloud is defined as the use and development of information technology resources (it can be a software solution, server or hosting service) offered as a service over the internet. These resources are made available to businesses with a pay-as-you-go model, minimizing the financial and workforce resources that businesses need to allocate for IT. For example, in the case of Cloud ERP, your ERP solution is located in a data center, not within your company. When you start using any software on the cloud, you just log in and use it through a browser without installing anything on your own computer or server. When you move your software and hardware to the cloud, you experience a significant decrease in your costs, while you do not spend effort, time, and labor to manage your IT resources. If you want to get more detailed information on this subject, you can read our article titled "Doing Business on Clouds – Cloud Computing."